Keggler’s Supply is a merchandiser of three different products. The company’s Fe

Question

Keggler’s Supply is a merchandiser of three different products. The company’s February 28 inventories are footwear, 19,500 units; sports equipment, 82,000 units; and apparel, 48,500 units. Management believes that excessive inventories have accumulated for all three products. As a result, a new policy dictates that ending inventory in any month should equal 30% of the expected unit sales for the following month. Expected sales in units for March, April, May, and June follow. Budgeted Sales in Units March April May June Footwear 15,500 24,000 32,000 35,000 Sports equipment 70,000 91,500 95,000 90,000 Apparel 40,000 38,500 34,000 23,000 Required: 1. Prepare a merchandise purchases budget (in units) for each product for each of the months of March, April, and May.

In this fomat:

march april may

footwear

budgeted sales for next month

ratio of ening inventory to future sales

budgeted ending inventory

budgeted units sales for month

required units of available merchandise

actual (or estimated) beginning inventory

budgeted purchases

and the same accounts for both sports equipment and apparel

Explanation / Answer

Keggler's Supply Details March   April   May June Footwear Budgeted sales for the month                   15,500               24,000                     32,000              35,000 Ending inventory ratio for next month's sale 30% 30% 30% 30% Budgeted Ending inventory                      7,200                  9,600                     10,500                       -   Required units of available merchandise                   22,700               33,600                     42,500 Less; Beginning inventory                   19,500                  7,200                       9,600 Budgeted Purchases                      3,200               26,400                     32,900 Sports Equipment Budgeted sales for the month                   70,000               91,500                     95,000              90,000 Ending inventory ratio for next month's sale 30% 30% 30% 30% Budgeted Ending inventory                   27,450               28,500                     27,000                       -   Required units of available merchandise                   97,450             120,000                  122,000 Less; Beginning inventory                   82,000               27,450                     28,500 Budgeted Purchases                   15,450               92,550                     93,500 Apparel Budgeted sales for the month                   40,000               38,500                     34,000              23,000 Ending inventory ratio for next month's sale 30% 30% 30% 30% Budgeted Ending inventory                   11,550               10,200                       6,900                       -   Required units of available merchandise                   51,550               48,700                     40,900 Less; Beginning inventory                   48,500               11,550                     10,200 Budgeted Purchases                      3,050               37,150                     30,700

Related Questions

Navigate

• Browse (All)
• Browse K
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.